In The Matter of Janine L. Campanella and James A. Campanella

[PDF page 1] THE STATE OF NEW HAMPSHIRE SUPREME COURT In Case No. 2011-0415, In the Matter of Janine L. Campanella and James A. Campanella, the court on November 20, 2012, issued the following order: The petitioner, Janine L. Campanella (Wife), appeals an order of the trial court denying her petition for contempt against the respondent, James A. Campanella (Husband). She argues that the trial court erred in construing the parties’ stipulated divorce decree. We affirm. The limited appellate record contai ns the following information. The parties were divorced in 2003. Paragraph 16 A (1) of the final version of the parties’ stipulated decree provided: The Respondent [H usband] is a 50.5% shareholder in a closely held corporation known as Campanella & Kelly, Inc., DBA the Lawn Dawg (the Company)[.] [Wife] waives all right, title and interest in [Husband’s] interest in said corporation, in existence at the time of the execution of this agreement, subject to the following conditions: 1. In the event the [sic ] that [Husband] sells, conveys, trades or releases all or part of his fifty and one-half percent (50.5%) interest in the Company, or if the Company merges with or is acquired by another company, or if the assets of the Company, such as its customer list, good will, telephone numbers, bulk of equipment, or the like are acquired by a third party or by parties within the Company, or a combination of any of the foregoing, within six years (2,190 days) of the date of the decree, [Wife] shall receive twenty-five percent (25%) of the gross proceeds from said sale. If in connection with such transaction [Husband] is compensated for his execution of a non-compete agreement and/or compensated via an employment contract in excess of two-hundred percent (200%) per year of his current income, the parties agree to submit to an expert, such as a CPA, the calculation of how much, if any, of such compensation should be deemed proceeds of the sale. The trial court found th at in 2009, Brighton Partners, LLC purchased all of the shares of the two other owners of Campanella and Kelly, Inc. (C&K) and 20.5 shares from Husband. Husband received $310,227.24 for his shares and [PDF page 2] paid Wife 25% of the proceeds. On the day of the sale, C&K changed its name to Lawn Dawg, Inc. The original Brighton partners and Husband formed a holding company. Although the trial court found that Husband transferred his remaining 30 shares to the holding company, it also found that he continued to own them. We construe this finding to be that he converted that portion of his ownership interest in C&K that was represented by thirty shares to an ownership interest in the holding company equivalent to the thirty shares. The trial court further found: “Although a value was assigned to his shares for tax considerations, [Husband] received no cash or any consideration for the transfer.” The sole issue before us is whether the trial court correctly construed the terms of the parties’ stipulated decree. Wife argues that the transfer to the holding company constituted a sale of Husband’s interest in C&K and, therefore, he was required to pay her 25% of the gross proceeds of the sale. A stipulated agreement is contractual in nature and, therefore, governed by contract rules. In the Matter of Taber-Mc Carthy & McCarthy, 160 N.H. 112, 115 (2010). Its interpretation is a question of law, which we review de novo. Id. When interpreting a written agreement, we give the language used by the parties its reasonable meaning, considering the circumstances and context in which the agreement was negotiated and reading the document as a whole. Id. Absent ambiguity, the parties’ intent will be determined from the plain meaning of the language used in the contract. Id. In denying Wife’s petition for contempt, the trial court found that Husband had paid Wife the amount required under the parties’ decree for the shares that he had sold. The court further found that because Husband retained ownership of the remaining thirty shares, no further payment was due to Wife. We agree. Because Husband did not sell or transfer his ownership of the contested thirty shares to a third party, there were no proceeds to be divided between Husband and Wife. As Husband observes, “The undisputed fact is that the restructuring of the business from a corporation to an LLC does not impact [W]ife’s rights in the least. She stands in the same position now as she did when the business was a corporation.” See, e.g., RSA 382-A:2-106 (1) (2011) (sale consists of passing of title from seller to buyer for price); Detroit Lions, Inc. v. Department of Treasury, 403 N.W.2d 812, 817 (Mich. App. 1986) (requirement of “sale” is that “absolute ownership over the subject of the transaction must be passed”); 67 Am. Jur. 2d, Sales § 20 (2003). Absent language in th e stipulated decree that required Husband to pay Wife a certain percentage of the value of his shares if, while retaining ownership, he converted the form of that ownership, we conclude that no further payment was due from Husband to Wife. See, e.g., Olbres v. Hampton Coop. Bank, 142 N.H. 227, 233 (1997) (parties generally bound by terms of agreement freely and openly entered into; courts cannot make better agreements than parties 2 [PDF page 3] 3 themselves have made or rewrite contracts merely because they might operate harshly or inequitably). Accordingly, we affirm the decision of the trial court denying Wife’s petition for contempt. Affirmed. HICKS, CONBOY, and BASS ETT, JJ., concurred. E i l e e n F o x, C l e r k